Pakistan's interim government, IMF agree on backup steps in review talks

Pakistan’s caretaker government and the International Monetary Fund (IMF) have reached a consensus on backup measures to be activated by the year’s end if significant deviations from fiscal- and monetary objectives threaten the broader aims of the ongoing $3 billion bailout to the cash-strapped nation, according to a media report on November 10.

Pakistan's caretaker government and the International Monetary Fund (IMF) have reached a consensus on backup measures to be activated by the year’s end if significant deviations from fiscal- and monetary objectives threaten the broader aims of the ongoing $3 billion bailout to the cash-strapped nation, according to a media report on November 10.

Informed sources told the Dawn newspaper that a visiting mission of the IMF and the Pakistani authorities would be concluding technical-level discussions on November 10.

“It will involve an exchange of the latest data, not only limited to the end-September quarterly performance, and queries and clarifications on all macroeconomic areas and their forward-looking outcomes,” the report said.

“While formal policy-level talks are expected to begin on Monday, both sides agree on the future course of action, including expanding the scope of taxation on the retail sector and improving the targeting of real estate-based revenue collection in case of any shortfall,” the report said.

The report said they agreed on backup measures to activate by the year’s end if significant deviations from fiscal and monetary objectives threaten the loan programme.

A fixed taxation scheme for retailers could be the first shot in the arm in case of a minor revenue gap, to be followed by real estate, through an ordinance with effect from January 1. Further clarity and specifics will emerge in policy discussions next week.

The sources said revenue targets aimed through import growth were the key concern for the IMF mission, as imports so far remain subdued than anticipated at the time of budget 2023-24 and the loan deal’s finalisation in July.